I thank the Chairman, and may I say, I did not expect to be back here again. I thank members of the committee for inviting us here this morning to resume its January 2019 examination of the NPHDB 2017 financial statements. I am joined by Mr. Paul Quinn, board member of the development board, Mr. Jim Farragher, its finance officer, and Dr. Emma Curtis, who is the medical director of the development board.
The National Paediatric Hospital Development Board was appointed in August 2013 to design, build, and equip a new children's hospital.
A planning application was lodged in August 2015 and An Bord Pleanála granted planning permission in April 2016 for the new children’s hospital, the paediatric outpatients and urgent care centres at Connolly and Tallaght hospitals and related developments, including the Children’s Research and Innovation Centre and a family accommodation unit adjacent to the new children’s hospital.
The expenditure as at 31 December 2017 was €67.2 million. There is some more detail in the document which I will not read out if that is okay. Also we have the draft unaudited expenditure as of 31 December 2018 and a date for Comptroller and Auditor General to audit these accounts has been set for late June 2019. The expenditure in 2018 is €129 million.
In December 2018 following the completion of the second stage of the two-stage procurement process, the final cost of the design, build and equipment programme for which the National Paediatric Hospital Development Board, NPHDB, is responsible is now at €1.433 billion, which is €450 million more than advised to Government in April 2017. Some €319 million of the additional cost relates to construction costs, and the balance of €131 million, which includes €50 million in VAT, relates to costs associated with staff, construction-design consultants, planning, design team fees, risk and contingency. Previously we included detail on the seven construction cost drivers in the briefing document sent to the committee for its review in January 2019. A PwC review on the escalation of costs was commissioned by the HSE in January 2019 and the findings of the review were published on 9 April.
As discussed with the committee in January 2019, once the board became aware of the significant additional costs emerging, the board set in place a review of alternative options. Contractually, the NPHDB did not have to proceed with the second stage - which is phase B above ground - construction works, and a number of options were considered and carefully evaluated. The outcome of the options evaluated was a recommendation by the development board, accepted by the HSE, the Department of Health and Government, to proceed with the instruction of phase B works as it offered the best solution commercially and ensured the completion of the children’s hospital in the shortest timeframe.
Since our last appearance before the committee in January 2019, the then chair, Tom Costello, resigned from the role and I would like to take this opportunity to acknowledge the contribution and personal commitment made by him. Shortly after, I was pleased to be appointed to the role as chair of the NPHDB and I appeared before the Oireachtas Joint Committee on Health to ratify my position as chair. In March 2019, the project director, John Pollock decided that as the two-stage procurement process was finalised and approved, and the project has now moved into the final construction phase, it was an appropriate time for him to leave the project.
To this end and as per one of the recommendations from the recently published PwC report on cost escalation "to strengthen the capacity of the NPH Executive", we have recently advertised through the Public Appointments Service for a chief officer and we hope to interview for this role within the coming weeks.
As indicated, since our last appearance a PwC review on the cost escalation of the project has also taken place and recommendations have been made in this regard. The board of the NPHDB has reviewed the report, acknowledged and noted the issues raised and the recommendations set out in the PwC report, and is developing an implementation plan against this.
Prior to the publication of the PwC report the board had identified and commenced implementing a number of key project changes, for example: strengthening the executive with separate chief officer and project director roles; establishing commissioning and project controls work streams within the NPHDB; key risks as a standing item at board meetings; agreed procurement strategy with stakeholders in relation to equipping the main children’s hospital; and putting in place performance-based indicators with core design team members. In addition, the NPHDB will continue to work with all stakeholders involved in this important project and will do all that is within its power to support the implementation of the PwC recommendations.
The paediatric outpatient and urgent care centre at Connolly hospital is complete and earlier this week was handed over to Children’s Health Ireland for it to commence the commissioning and transitioning of staff. Children’s Health Ireland will operate the service and the centre is due to open in July 2019.
Decant works at Tallaght University Hospital are now complete, and the new crèche, changing facility and offices are open. Construction work on the 4,600 m2 paediatric outpatient and urgent care centre started last month and is due to open in 2020.
Construction work on the new children’s hospital on a shared campus with St. James’s is progressing well with the structural frame, walls, slabs and columns now above ground level in most advanced areas. Basement excavation and piling are now substantially complete. The mechanical and electrical fit-out of the basement plant areas is due to commence shortly. Project costs incurred to end of March 2019, including construction costs were €314 million.
Construction work on the new children’s hospital is scheduled to be completed in quarter 3 2022. This will be followed by a period of commissioning and it will open in 2023.
I thank members for their attention. We are happy to answer any questions.